It may sound counterintuitive, but applying for and getting new credit cards after a bankruptcy can actually be a sound financial move – if you handle things smartly.
Here’s why:
The odds are good that your credit scores dropped quite a bit when you filed for bankruptcy. One way to begin improving those credit scores is to make on-time payments on a revolving credit account.
If you do apply for a credit card after a bankruptcy (and make sure it’s after, not before, since taking on additional credit before you’re bankruptcy is completed can jeopardize your case), you’ll want to get started reasonably soon. The reason why is that older accounts tend to be more beneficial to your credit scores than newer ones, so if you’ve got many years of on-time payments going for you, your scores should jump fairly quickly once the bankruptcy is removed from your reports.
The best type of card to apply for in these instances is a secured credit card, which can be easily obtained even after you’ve gone through a bankruptcy. Often, a secured card is available immediately after your bankruptcy is discharged. You’ll need to place a security deposit with the card issuer, but you’ll then get a major credit card that can be used in exactly the same manner as any other credit card.
Also, you’ll want to go with a card that will report your payment information each month to the three main credit reporting agencies – Experian, Equifax and TransUnion. Then, and this is probably the most important factor, be sure to make your payments on time every month. Just one late payment can derail your hard work and lower your scores.